The failed deal adds to evidence of dim prospects for large new mines and more caution in China's push for assets overseas. It also highlights Africa as a risky region for developing projects mostly due to regulatory uncertainty and lack of infrastructure, ranging from power to transport routes.

Sundance's shares plunged 56 percent on Tuesday after it terminated the $1.4 billion takeover by China's Hanlong, with investors saying there was little hope now for the Mbalam-Nabeba project on the border of Cameroon and the Republic of Congo.

"Clearly the sale process isn't happening for all sorts of reasons. That's going to put into question the whole viability of the project and the ability to fund it," said Darko Kuzmanovic, a resources fund manager at Caledonia Investments.

The biggest hurdle for the project is not the mine, aiming to produce 35 million tonnes a year of iron ore, but funding and construction of a deepwater port and a 510-kilometre (320-mile) rail line from Congo to the Cameroon coast.


I give ourselves a small round of applause each time a deal like this falls through. It becomes increasingly likly iron ore will be a volume driven business possibly within a decade, so each stranded monster project at this point in time is a HUGE boon for us and our long term prospects.